Supply Chain View

Is there a developing backlash against Six Sigma? Scott Adams published a Dilbert strip in November last year with the punchline “Why don’t we jump on a fad that hasn’t already been widely discredited?” (Dilbert strips are now available online for only one month, but Gemba Panta Rei provide a full transcript in a post on this subject.)

The strip seems to have hit a nerve. iSixSigma hosts the following discussion on the blog section of their site: http://blogs.isixsigma.com/archive/dilbert_on_six_sigma_and_innovation.html

The substance behind the strip

Dilbert makes reference to an article in Fortune magazine – from a series that revisits Jack Welch’s famous 7 Rules – that claims that:

… of 58 large companies that have announced Six Sigma programs, 91 percent have trailed the S&P 500 since, according to an analysis by Charles Holland of consulting firm Qualpro (which espouses a competing quality-improvement process).

You can find the full text of the article at: http://money.cnn.com/2006/07/10/magazines/fortune/rule4.fortune/index.htm.

Fortune proposes that the reason for the poor performance of firms following Six Sigma is that “it is narrowly designed to fix an existing process, allowing little room for new ideas”.

Looking for easy solutions?

As modern, rational managers, we would like to think that our behaviour and decision-making at work is reasoned and consistent. However, we are just as likely as anyone to hold mutually contradictory views based on competing emotions.

In the case of management techniques, we know deep down that there are no silver bullets that will solve all our problems, and yet part of us is desperate to believe that there must be something like that out there. It’s a combination of hope, and fear (that our competition will find this solution before us).

It’s my opinion that these emotions underlie the over-selling of techniques or management “themes” such as Six Sigma and Lean. Good, even excellent ideas become presented to employees and management as panaceas.

If we add to this a number of misguided implementations – not understanding the business, not understanding the techniques – we quickly get to the point where the idea is popularly discredited.

Six Sigma and innovation

This is what I think is mistaken and simplistic about the Fortune article: Six Sigma has much useful to say about innovation, and its quality elements should be applied in line with the goals of the enterprise.

To take the first point, the obvious example is QFD – Quality Function Deployment – which when properly done is a way to design services and products that genuinely meet the desires of the market. It may be that QFD highlights value in product novelty – in that case it would steer the enterprise directly toward innovation.

Secondly Treacy & Wiersema’s Value Disciplines help in identifying whether Six Sigma will have a great impact on the bottom line. Treacy and Wiersema suggested that successful firms concentrated on one of three organisational goals:

• Operational Excellence
• Product Leadership
• Customer Intimacy

I believe that unless the company is majoring on operational excellence, it will be hard to find a good organisational fit for Six Sigma. That’s not to say it won’t find a place or add value, just that it won’t take centre stage in the business culture (which has obvious implications for those running Six Sigma programmes in those organisations).

Links

http://www.12manage.com/methods_valuedisciplines.html – more on Value Disciplines
The Discipline of Market Leaders – Treacey and Wiersema’s book at Amazon UK